The amount of success it takes for leaders to become overconfident isn't terribly large.

There's a tendency to look at investments in isolation. Investors focus on the risk of individual securities.

If people are failing, they look inept. If people are succeeding, they look strong and good and competent. That's the 'halo effect.' Your first impression of a thing sets up your subsequent beliefs. If the company looks inept to you, you may assume everything else they do is inept.

Employers who violate rules of fairness are punished by reduced productivity, and merchants who follow unfair pricing policies can expect to lose sales.

That's one of the real dangers of leader selection in many organizations: leaders are selected for overconfidence.

In essence, the optimistic style involves taking credit for successes but little blame for failures.

You should expect little or nothing from Wall Street stock pickers who hope to be more accurate than the market in predicting the future of prices. And you should not expect much from pundits making long-term forecasts.